MONDAY SCOUTING REPORT: It's Jobs Week In America

Courtney Richardson via DvidshubIt's jobs week in America. On Friday, we'll get the February employment situation report from the Bureau of Labor Statistics. This will tell us how many jobs were added by U.S. companies and whether the unemployment rate is moving,

Meanwhile, a number of central banks around the world will be holding their regular meetings to set monetary policy. This will be of interest as many experts sound warnings of currency wars.

There are lots of things to keep an eye on this week. So let's get right to it.

Top Stories

Last night, CBS's '60 Minutes' aired a report on what appears to be a colossal real estate bubble in China. You see, China's economic growth has brought riches to the middle class. But due to limited investing opportunities, the Chinese have shoveled their wealth into real estate, where prices only appear to be going up. Now China is left with vast cities filled with brand new, empty apartment buildings. Experts fear that this is a warning sign that China's property bubble will collapse, which could have very bad implications for the global economy.

This is the first full week of trading since the sequester kicked in on March 1. These are the $85 billion worth of Federal budget cuts that will ripple through the economy. Despite the lack of a negative market response on Friday, experts warn that the costs of the sequester will soon catch up to the economy. "Investors are underestimating the strain on the US consumer," said Michelle Meyer, U.S. economist at Bank of America Merrill Lynch. "There are positive factors, such as wealth appreciation and modest job growth, but the shock from the payroll-tax hike coupled with delayed tax refunds, rising gasoline prices and poor weather should result in a crippled consumer."

Economic Calendar

On Friday, we'll get the February jobs report. Economists estimate that U.S. companies added 150k new jobs. This is down slightly from 157k in January. This report will be closely watched as economists and politicians try to better understand the implications of the recent payroll tax hike and the uncertainty born out of the debate over the sequester.

The ISM non-manufacturing (aka services) index report will be released on Tuesday. Economists are expecting the number to fall to 55.0 from 55.2 last month. Despite the decline, any reading above 50 signals growth, which is welcome.

The Bank of Canada will issue its interest rate decision on Wednesday. And the Bank of Japan and the Bank of England will issue their decisions on Thursday. No one is expecting too much exciting in terms of monetary policy changes. However, it'll be interesting to see if they address efforts by other central banks to devalue their currencies.

Market Update

Stocks are within points of their all-time highs. Bears warn of falling earnings growth expectations and stretched valuations. Bulls point to longer-term growth prospects and global easy monetary policy.

"An equity correction may clarify a key issue: What's been driving equities - loose monetary policy, or expectations of better macro and earnings?" say Morgan Stanley's Gerard Minack in a note last month. This still holds.